Pump Prices Packing Punch to Motorists, but Show Signs of Tapering Off

At $2.81, the national gas price average is 45 cents more expensive than a year ago. With the unofficial kick-off to summer just weeks away, prices are expected to increase, but a tapering trend may be emerging.

“If this past week’s moderate increases are any indicator of what’s to come, the fast rate at which gas prices were increasing may be slowing down,” said Jeanette Casselano, AAA spokesperson. “On the week, the national average held steady and 19 state averages remained flat or saw decreases in gas prices. Despite this stability, drivers on the West Coast and in Idaho, Utah and Pennsylvania are paying $3/gallon.”

Pump prices in the West Coast region are among the highest in the nation: Hawaii ($3.63), California ($3.63), Washington ($3.32), Alaska ($3.28), Nevada ($3.25), Oregon ($3.23) and Arizona ($2.90). On the week, prices in the region have all increased. Arizona (+5 cents) saw the biggest leap, while Hawaii and Nevada saw the smallest increases at two cents each.

After a steady decline over the past month, gasoline stocks in the region grew during the week ending on April 27, according to the Energy Information Administration (EIA). At 30.5 million bbl, stocks grew by approximately 1 million bbl. Storage levels are now roughly 500,000 bbl more than the same time last year.

Great Lakes and Central

A few of the states in this region — Ohio (-8 cents), Michigan (-7 cents) and Kentucky (-5 cents) — land on this week’s top 10 states with the biggest decreases in pump prices. However, the majority of states in the Great Lakes and Central region saw increases: Indiana (+6 cents), Wisconsin (+4 cents), Illinois (+2 cents), Kansas (+2 cents) and Minnesota (+2 cents).

This week, motorists in Indiana (+66 cents) have the largest year-over-year gas price difference in the country. Illinois (+52 cents) and Michigan (+51 cents) join Indiana on the top 10 list of states with the highest year over year increase. South Dakota (+31 cents) ranks as the state with the smallest year-over-year difference in the country and the region below Minnesota (+36 cents) and North Dakota (+35 cents).

Gasoline inventories in the Great Lakes and Central states have declined steadily for eight weeks. With the latest draw of 340,000 bbl, total inventories sit at 56.2 million bbl, which are on par with levels in April 2017.

South and Southeast

Gas prices are cheaper, albeit it a few cents, in South Carolina (-2 cents), Florida (-1 cent) and Georgia (-1 cent), while prices remained flat on the week in Texas and Oklahoma. Among the South and Southeast states, New Mexico (+2 cents) saw the largest jumpin prices in the last seven days while motorists in Mississippi ($2.54), Alabama ($2.56), Texas ($2.60) and Oklahoma ($2.52) saw no change in pump prices.

Oklahoma ($2.52), Arkansas ($2.53) and Mississippi ($2.54) are the three states in the country with the cheapest state gasoline averages.

Inventories took a slight draw (600,000 bbl) on the week, but remain close to the 82 million mark. Total inventories sit nearly 2 million bbl more than this time last year.

Mid-Atlantic and Northeast

On the week, Pennsylvania’s gas price average held steady at $3.02, while Connecticut ($2.98), New York ($2.95) and Washington, D.C. ($2.95) inch closer toward the $3 mark. In the region, gas prices moderately increased on the week with the largest jump of four cents in Washington, D.C. On the flip-side, North Carolina and West Virginia saw decreases of a penny on the week while gas prices in Maryland ($2.79), Virginia ($2.62), Delaware ($2.76) and Tennessee ($2.89) held steady.

At $2.89, New Jersey’s gas price average is 51-cents more expensive on the year – the largest year-over-year difference in the Mid-Atlantic and Northeast region.

Gasoline inventories grew by a substantial 1.3 million bbl on the week, according to the EIA. At 62 million bbl total, Mid-Atlantic and Northeast inventories are at their highest levels in nearly two months.

Rockies

Wyoming (+6 cents) and Montana (+3 cents) land on this week’s top 10 states with the largest weekly increases. Idaho ($3.11) and Utah ($3.09) continue to carry the most expensive prices in the region at $3.10. Even with a 2-cent increase, Colorado ($2.66) has the cheapest average in the Rockies region.

With a 100,000 bbl draw, total gasoline inventories dropped to their lowest level of the year totaling 7.2 bbl, according to the latest EIA data. Regional inventory sits nearly 600,000 bbl below levels at the end of April 2017.

Oil market dynamics

At the close of Friday’s formal trading session on the NYMEX, WTI increased $1.29 cents to settle at $69.72 – a new high for the year. Oil prices ticked up higher last week following reports that President Trump will potentially decline to recertify the Iran nuclear deal on May 12 and may impose new sanctions on the country. Iranian Foreign Minister Mohammad Javad Zarif respondedthat the country is unwilling to renegotiate the deal it set with the U.S. in 2015 under the Obama Administration. The decision to not recertify the deal could increase tensions in the volatile region, leading to global supply disruptions. Crude prices are likely to continue climbing as the May 12 deadline for the recertifying draws near and it becomes increasingly likely that the U.S. will decline to renew it.

Additionally, EIA’s weekly petroleum status report noted that U.S. crude production hit another record high at 10.62 million b/d. The growth in production occurred alongside growth in crude inventories, which grew by 6.2 million bbl last week. At 436 million bbl, inventories are nearly 92 million bbl lower than they were at this time last year.

Domestic crude production will likely see continued growth through 2018 – supported by a steady increase in active oil rigs. Baker Hughes, Inc. reported that last week, the U.S. added nine rigs, placing the total at 834. The total rig count is now 131 more than the figure at the same time last year.

Motorists can find current gas prices along their route with the free AAA Mobile app for iPhone, iPad and Android. The app can also be used to map a route, find discounts, book a hotel and access AAA roadside assistance. Learn more at AAA.com/mobile.